. we happen to be at that point, and this thursday the board is meeting, and they are going to approve the survey, so i can tell you preliminarily that we then go through a process to the shore we do the calculations iraq -- to insure we do the calculations correct. i can tell you for 2012 is set to increase from $2.60 per hour to $2.20 per hour. forgive me. that is for the large employers, and for the medium-sized employers, the hourly rate is set to increase from $1.37 an hour to $1.36 an hour. those slight increases are

fairly consistent to what we have seen in each of the past four years. but as the rate we are going to see for 2012. we intend to provide notice to our employers we publish about on our website. we also have notices we send out to employers. even our was going to move on to a quick highlight of some of the analysis i did. just by way of background, the

ordinance requires us to collect data on that basis from employers about how the specifically are meeting the ordinances' requirement for health care. copies are also available on our website. of approximately 300,000 forms we collect each year with good data that represent responses on behalf of about 130,000 employees, we were able to determine for 2008 and 2009 the most common and popular way to meet the health care expenditure requirement in the ordinance was to provide traditional group health insurance coverage to employees. that was the overwhelming majority of employers chose that as the primary method fork spending requirements.

it changed slightly from 2008 to 2009. it was switched from 84% to 81% of employers. we broke down the other categories of ways to meet the health care expenditure requirement. there are health spending accounts and direct reimbursement systems. those were a relatively are comparatively small percentage, and they did not change dramatically from 2008 to 2009. the other method was to extend the city option to the department of public health so those employees could take a vintage of the help the san francisco program or medical reimbursement -- the other employees could take advantage of the healthy san francisco program or medical reimbursement for employees that live outside of san francisco. in addition to the fact that

the group health insurance was clearly the most popular, a couple of other highlights. the very largest employers were those most likely to use the city's option to meet the health care expenditure requirement. the employers of over 500 employees at the highest rate were using the city option at 13%. we collected industry data in 2008. there were a few highlights with respect to industries. the construction industry was the highest industry with respect to providing group health insurance. they were at 92%. as indicated, all employers were at about 84%. they were at the high end there. the administrative support and waste management industry was the highest usage of the city's option at 21%.

there are some interesting industry-by-industry breakdown'' there as well. the other highlight that came out was that some of the direct reimbursement and health spending accounts programs had some lower utilization rates. employees were not able to or did not take advantage of those programs at a higher rate. those are a few of the highlights. we have been sensitive to employer needs, and have tried to work hard to make our data collection effort as simple as possible. each year we change our form a bit.

we try to simplify the form. the other thing we are in the process of doing -- we are working with the tax treasurer and collection to make the form available online for employers. more and more city forms are being made available for submission online. this is something more and more employers are doing with all sorts of data. we are in the midst of negotiations and trying to get this year's reporting form available for employers on line. we will have that decision made, if we can accomplish that in the coming weeks. typically, we do a mailing out to all the employers in march. we ask that the submissions of annual reporting date to be completed by the end of april. we continue with that schedule this year. we will be providing the opportunity to do that online for some employers. for those who would prefer to do

a hard copy, that will be a backup option as well. that concludes essentially what i wanted to share with you. there is technical information there, so my apologies. if you have any questions, i can try to clarify or explain it. vice president clyde: thank you for your presentation. it is important the small business community be informed of the program, the requirements, and what will happen in the future? we need to be able to plan for our expenses as time goes by. i would like to say that i support this program. i think it is well designed in many respects and very favorable to employers because there are many ways you can manage your health care expenditures as a

small or medium-size employer. i really have to commend help the san francisco and the health care security ordinance because it gives us the opportunity to improve on group plans. if you are a small employer, the group plans have restrictions in the size of your hourly restrictions and size restrictions. a very positive thing for san francisco businesses is that this is a way to provide health care for employees that group insurance currently does not allow employers to follow. i also would like to say that the office has done a great job in in forming the small business community. the outreach has been great over the past three or four years the program has been in development and in its implementation. that being said, i have a couple of questions. those are for the small business

community. are there areas where you are seeing interpretations difficulty in interpreting the law? where are you seeing small businesses -- are there places whereupon -- where you are seeing problems with the implementation, and do you see solutions for those? >> thank you for your comments generally. i think we have seen, trending over time now, that the law has been in place for many years and there has been a better understanding from employers and small employers. there occasionally are confusions are questions when we have business owners that have a number of businesses or a number of locations, and so there are technical elements of the law that have to do with whether they qualify as one larger

employer or if these can be seen as silos for a number of small businesses, each of which have enough employees to qualify as a covered employer under the law. that is maybe not specific necessarily to small businesses, but that is an area of confusion we see occasionally, an area where it is difficult to interpret on occasion. are there areas of confusion? nothing comes to mind. employers need to have worked -- employees need to have worked a certain number of hours per week to qualify for health care expenditures to be made on their behalf. some of the smaller businesses have part-time employees, and there can be a little bit of

difficulty in interpreting whether a part-time employee whose hours change from week to week over a given quarter -- if they have worked enough hours to qualify. questions arise occasionally in that area. vice president clyde: i think it is fair to say that the majority of the complaints we get that we follow up on our from workers whose employers are ignoring the law, be they large or small. occasionally, investigations involve employers who have chosen reimbursement accounts, and workers are having trouble getting reimbursements. >> i want to take a moment also to thank you for the concept of highroad employer. i think san francisco is really interested in raising the bar.

it might be difficult at times, but it is really important to keep in mind that raising the bar really lifts us all. but i am -- i really want to help people understand how they can comply. i am looking forward to looking at the new form as well, because it is kind of a confusing -- for some small employers, especially when you are in the under 50 range, 25 or 30 -- sometimes, small-business owners are the only one doing all their bookwork. we do not tend to have human resources people. we do not have a human resource department, or even a dedicated paperwork person. so it can take some time and we need all the help we can get.

>> i would like to comment on both of your points. i have been asked numerous times why san francisco legislates these great labor laws, and what is it about our city. i will point to the history of the strong labor movement, but i also point to highroad employers. our city is blessed with a community of employers who, as you call them, highroad employers, who want to provide well for their employees. on the other point, if i may, commissioner, if you would be willing, we would love to run by our draft of the 2010 annual reporting form for your feedback, if you are interested in offering it. vice president clyde: i would be very interested in that. there are two issues.

one is fairness for all workers. the other one is i believe that health care is something that we have to -- that we should all have access to. and the longer and harder work for that, the sooner that they will come. president yee: i think it would be beneficial if you can share that report our director so all of the commission can have a copy of it. commissioner o'brien: i have one technical question, i suppose. it says there is a correlation between employer size and participation in the city option. the larger the employer, the more likely it will use the city option. is that right? the bigger employers are more likely to go with the city option than with the group care? is that correct?

>> yes. i was just calling to point out -- i will address the more complicated "why" question, but it is correct. table 7 shows that as employer size increases, there are four categories. use of the city option increases from 4%, 6%. we definitely do see that correlation. >> i might suggest it may have to do with large employers who operate in many states, who do not have a uniform health insurance plan. so they choose the city option as the simplest for local. commissioner o'brien: make sense. president yee: i am sure your office is getting inquiries and complaints, but i want to ask the director. the small business assistance

center -- do we get many inquiries regarding health care? other small-business owners who might be not so clear? >> i think initially, in the beginning, we did get inquiries, which we've been directed to the office of labor standards and enforcement. i think now not as many inquiries. sometimes, we might get inquiries right before the new fee comes up online, because people are trying to work on their budgets. but i think we are doing a relatively good job informing folks at the counter, and we have the pamphlet always available, informing people about the specific liberal laws -- the labor laws that are specific to san francisco. i think the first year, there was a little more confusion. i think as reported that

businesses are better understanding. president yee: that is good. thank you. any more comments or questions? vice president clyde: just -- i just have a comment about the healthy -- it is really not for your office. it is not for your office, but things for the presentation and your work with the small business community. i mean, you have done great work with us. it is more just a discussion, a little bit, about the professionalism asian -- the professionalization of labor and the cost of doing business in san francisco. it is sometimes difficult to communicate the difference between concerned about our overall cumulative cost of doing business and the narratives of a specific program. i got a little bit of a catch in

my throat but when i heard the expenditure next year is going to be about a $50 an hour for a small employer on top of the -- about $1.50 an hour for a small employer on top of the highest minimum wage in the country. there are a lot of high-cost jurisdictions that have significantly lower minimum wages and do not have mandated costs on top. i think it is important that policymakers and also the city understands that when small businesses are advocating for some control in our costs we are not necessarily advocating against the program. healthy san francisco kind of got pushed into the firing line, and i think it has been very difficult for businesses that do not make high income per employee to cope with some of

these costs. my concern is that we keep our employees census as low as possible. people do not want to go over either threshold. they are very careful about that. also, it incentivizes some businesses to locate outside of the city. and i am aware of the study from the berkeley center of labor saying it did not really cost jobs in san francisco, but i would take exception to that. it has incentivized some businesses to invest and relocate outside of the city, and invest in their expansions outside of the city. again, this is about the cumulative cost of doing business. it is nothing to do with the program, which i support. but looking forward, it is important for us to get this information to policy makers.

that is my comment. >> i just had one question. with the health service's board figuring out the dollar amount on january, is that because of a specific reporting time on the dollar figures for each of the county's? is there a way of getting that information a little bit earlier? i think a lot of businesses go with the calendar year in terms of working on their budgeting. if there is a way to get that information earlier -- the end of the calendar year is also when the county's two they're figuring on the health care cost. -- when the county'ies do their figuring on the health care

cost. >> we are getting in 2011 rates for 2012. >> you did. >> i can tell you that the charter mandates that the survey be completed by mid-january. we have done the survey since the early 1970's. i do not know, in all honesty, whether that data could be accumulated earlier. i will say that the mandates -- that number is calculated by mid-january at the latest. [inaudible]

we do everything we can to disseminate the information before the requirement in march. we do it as soon as we can and put the information on our [inaudible] >> thank you. i am sorry if i missed the calendar year. vice president clyde: this is a final comment for my fellow commissioners. you may be aware that the health care reform bill is now allowing 35% tax credit to small businesses for health insurance and the provision of health insurance. these expenditures do not qualify because they are not health insurance. for the medium and larger employers who are choosing the city option for the reimbursement accounts, they will not qualify for the 35% tax credit in this year.

one of the questions i will have for the future is if there is some way that these programs that cities, counties, or states implement with their public health department, that these expenditures also qualify as insurance. i would like to see it. currently, it does not qualify for the tax credit because it is not insurance. but i would like to see some movement that it qualified. ,u

in the legislation, we increased that. there were previously 10,000 taxpayers who had to file even though they paid no tax. we now estimate that about 3000 of those taxpayers will not have to file. one last piece of paper work. no one's tax is going to change. but it is something that, because we were just getting -- the other piece in the legislation was that the deadline for renewing business registration has been moved out to the end of may.

the deadline for renewing your 2011-2012 year was coined to beat a very 28. that was moved to may 31. we found that with taxpayers in many cases planning 120 days up for their renewal give you quite a large time frame. we are a little bit closer, having 30 days prior to taking effect. we thought that was good for taxpayers. "we have done so far -- what we have done so far to assist folks is we had a mailing go out in december explain to taxpayers -- explaining to taxpayers what they are. we are going to have folks saying, "how come i am not getting my business registration at the same time?" we are trying to make